Rayner to open Labour conference with pledge to end 'Tory procurement racket' with plan to target public spending at creating jobs and boosting growth

Labour Deputy Leader Angela Rayner has set out Labour’s plan to maximise post-Brexit opportunities by pledging every pound given out in procurement is guided by the national interest to create local jobs, skills and regeneration.

With gross spending on public sector procurement totalling £379 billion in 2021/22 across the UK, Rayner said the next Labour Government would unleash the power of procurement for the public good. [1]

In her opening speech to Labour conference tomorrow (Sunday), the Labour Deputy Leader will vow to turn the Conservatives Government’s procurement policy on its head, with a new National Procurement Plan.

Labour’s new National Procurement Plan will:

1. Reward businesses and enterprises that create local jobs, skills and wealth, treat their workers right and pay their taxes responsibly;
2. Give small and medium (SMEs) businesses fairer opportunities to benefit;
3. Get tough on waste with suppliers who repeatedly fail to deliver seeing public money clawed back and ploughed straight back into local communities – and failed providers struck off;
4. Guarantee transparency for taxpayers about how their money is spent through a publicly-accessible dashboard of government contracts tracking delivery and performance;
5. Oversee the biggest wave of insourcing in a generation.  

Labour’s plan will boost decent local businesses and social enterprises that pay their taxes and treat their workers properly, so they won’t be shunted to the back of the queue behind global corporates who ultimately contribute less.

Calling time on the Tories’ "procurement racket run at the expense of the British taxpayers", the Labour Deputy Leader will pledge get tough on waste, with taxpayers’ money clawed back and ploughed straight back into local communities, while failed providers face being struck off.

Labour’s Value for Money Guarantee will ensure every penny of procurement spending will be guided by the national interest, supporting the return of local jobs, skills and wealth-building and giving small and medium enterprises a fair chance to benefit.

Earlier this year Conservative ministers wrote off nearly £10 billion on personal protective equipment (PPE) that was either substandard, defective, past its use-by date, dramatically overpriced or undelivered. [2]

Angela Rayner MP, Labour's Deputy Leader, said:  

"Labour is calling time on the Tories’ procurement racket run at the expense of British taxpayers.  

"Labour's National Procurement Plan will support British enterprise, drive up standards and deliver for our communities.  

"Our Value for Money Guarantee will ensure every penny of public procurement spend will be guided by the national interest to support the return of local jobs, skills and wealth-building and give small and medium enterprises a fair chance to benefit.

"The Tories have left a legacy of sleaze, cronyism and corruption, with the British people left to pick up the bill. Labour will unleash the power of procurement for the public good.

"Under the next Labour Government there will be no hiding place for cronies and no corner for corruption. We’ll give the Tory sleaze merchants their marching orders, end handouts to tax havens and strike off failed providers.

"The Tories’ policy of rewarding failure will be brought to an end. We’ll clawback taxpayer’s money and plough it straight back into communities to support the people who build the wealth in this country."

Ends

Notes to editors  

Labour’s National Procurement Plan will:

1/ Reward businesses and enterprises that create local jobs, skills and wealth, treat their workers right and pay their taxes responsibly.

• By making social value mandatory in all contracts and through issuing a new Labour National Procurement Plan, we will maximise post-Brexit opportunities to ensure all public procurement promotes the national interest.  
• Together, these changes will ensure that firms that uphold standards of responsible taxation, local job creation, skills and training, environmental protection, workers’ rights and trade union access are rewarded as they tender for government contracts.
• Ministers will be required to report back to the Cabinet Office and Parliament on how suppliers delivering contracts in their departments are meeting these values.

2/ Give small and medium (SMEs) businesses fairer opportunities to benefit.

• We will ensure smaller contracts include an SME at shortlisting.  
• We will tackle late payments too, by reviewing and writing the Prompt Payment Code into law.  

3/ Get tough on waste with who suppliers repeatedly fail to deliver seeing public money clawed back and ploughed straight back into local communities and failed providers will be struck off.

• We will give Labour’s Office for Value for Money (OVM), announced by Rachel Reeves in 2021, real teeth to punish those who waste taxpayers’ money through clawback clauses in contract design.  The money clawed back from firms who have wasted taxpayers’ money will be reinvested in local communities.
• We would also introduce a requirement for Departments to consider past performance in the granting of contacts to suppliers, including late payments.  

4/ Guarantee transparency - and give the public transparency about how their money is spent.  

• Our open and transparent digital database of government contracts will give taxpayers all information about how their money is being spent in one place.

5/ Oversee the biggest wave of insourcing in a generation.

• Labour has already committed to the biggest wave of insourcing in a generation. Alongside this we will mandate that procurement officers for national government contracts show that work could not be better delivered in house before tendering.
• Beyond this, we will reinstate and strengthen New Labour’s Two-Tier Code, otherwise known as the ‘Code of practice on workforce matters in public sector service contracts.’  

Rayner will also announce Labour’s ‘Fair Work Standard’, which will:

• Raise standards across the economy, underpinning a Fair Work Code of Practice for the public sector that will ensure fair conditions, job and working hours security, learning and training opportunities, access to trade union activity and work that promotes physical and mental wellbeing. 
• Create a voluntary ‘Fair Work Standard’ kitemark to celebrate the very best of the private sector, who will be able to this accreditation when competing for national Government public contracts.    
• Ensure fair work for the self-employed, by giving these workers the right to a written contract and timely payment in law.  

[1] House of Commons Library, Research Briefing Number 9317, July 2022

[2] Covid-19: Government writes off £10bn on unusable, overpriced, or undelivered PPE, BMJ 2022; 376, 3 February 2022, doi